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To: DFG

This is an issue that begs for a federal solution. Internet sales are overwhelmingly INTERSTATE COMMERCE, which the Constitution clearly spells out as subject to federal regulation. Apply a single, federally determined tax rate to all interstate transactions conducted over the internet, and split the revenue between the buyer’s and seller’s states. Eventually this could become part of a larger system to replace the federal income tax with a federal sales tax. It would also give states with very high sales tax rates incentive to lower those rates, as there would be political pressure from in-state sellers to lower the tax so as to stop incentivizing state residents to buy over the internet instead of buying locally.


41 posted on 01/13/2009 9:14:14 AM PST by GovernmentShrinker
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To: GovernmentShrinker
Eventually this could become part of a larger system to replace the federal income tax with a federal sales tax.

Or we could end up with both a federal income tax AND a federal sales tax, on top of existing state sales tax.

46 posted on 01/13/2009 9:22:43 AM PST by rabscuttle385 ("If this be treason, then make the most of it!" —Patrick Henry)
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To: GovernmentShrinker
Internet sales are overwhelmingly INTERSTATE COMMERCE, which the Constitution clearly spells out as subject to federal regulation.

The states are very clear in their use tax laws. There is no tax on a product unless it comes to rest in that state. For example, you buy a widget from CA to have shipped to you in NY. None of the states your widget traveled through has any right to tax your widget (they may tax the mode of travel). When your widget reaches you and "comes to rest" in NY State, NY can collect "use tax" on that product (because sales tax wouldn't apply as the sale didn't take place there).

The Commerce Clause does not prevent this, it prevents the originating and pass-through states from collecting sales/use taxes on something.

47 posted on 01/13/2009 9:22:59 AM PST by IYAS9YAS (Hey Obama, why lawyer up when you can pony up? Show us your vault copy BC)
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